The Historical and Policy Context of the Michigan Mental Health System

1. The Historical and Policy Context of the Michigan Mental Health System Presentation to the Michigan Mental Health Commission February 2, 2004

2. Organization of Mental Health Services • Institutional Era • Rationale for the Establishment of Institutions • Humane Inclinations and Motives • Industrialization and Urbanization • “The Sleep of Reason Produces Monsters” – Goya • Massive Size, Overcrowded, Underfunded & Understaffed • Pessimism about Recovery and Discharge • “Institutionalism” (Passivity/Dependency) and Isolation • Patient Mix • Peak National Census: 559,000 (1955) • Over ½ of Hospital Beds in U.S. Occupied by Persons with Mental Illness

3. Seeds of Change • Media Exposé of Institutional Conditions • Experience of War-time Psychiatry (WW II) • National Institute of Mental Health (1949) • Leadership at a National Level on Brain Research, Mental Illness and Mental Health • Introduction of Chlorpromazine (Drug Therapy) • Innovations in Hospital Milieu Therapy • Mental Health Study Act of 1955 • Joint Commission on Mental Illness and Health • Action for Mental Health (1961)

4. Action for Mental Health (1961) “The objective of modern treatment of persons with major mental illness is to enable the person to maintain himself in the community in a normal manner. To do so, it is necessary (1) to save the patient from the debilitating effects of institutionalization as much as possible, (2) if the patient requires hospitalization, to return him to home and community life as soon as possible, and (3) thereafter to maintain him in the community as long as possible. Therefore, aftercare and rehabilitation are essential parts of all services to mental patients, and the various methods of achieving rehabilitation should be integrated into all forms of services…” Joint Commission on Mental Health and Illness: Action for Mental Health

5. Further Federal Developments • Community Mental Health Centers Legislation (1963 – Initial Legislation) • Facility Construction Grants • Staffing Grants • Core Services • Medicaid (1965) • Institution for Mental Disease (IMD) Exclusion • Crisis in Child Mental Health (1969) • Second Report of the Joint Commission on Mental Health and Illness • Supplemental Security Income Program (1972)

6. Developments in Michigan • Department of Mental Health (DMH) Established (1945) • State Hospital Census Peaks at 20,413 (1957) • Society for Mental Health Study Committee (1959) • Act 54 (Community Mental Health Services Act) • “Increasing numbers of persons afflicted with psychiatric disorders require care and treatment in mental institutions. The social and economic losses caused by these costly infirmities are a matter of grave concern to the people of the state. This act is designed to encourage the development of preventative, rehabilitative and treatment services through new community mental health programs and the expansion of existing community services.” • Act 54 of the Public Acts of 1963 • 1967 State Psychiatric Hospital Census is 14,525 • Expansion of State Children’s Psychiatric Hospital Capacity

7. Emerging Problems: Deinstitutionalization • Three Components of Deinstitutionalization • Discharge of Persons Residing in Psychiatric Hospitals to Alternative Community Settings and Services • Diversion of Potential New Admissions • Development of Special Services, Programs and Support Arrangements in the Community to Assist Non-institutionalized Persons with Mental Illness • Organization, Financing and Core Services of Community Care • Slow Progress in 3rd Component - Growth of Alternative Community Services • Unanticipated Situations and Conditions

8. Federal Response to Emerging Problems • GAO Report to the Congress (1977) • Returning the Mentally Disabled to the Community: Government Needs to Do More • “Mentally disabled persons have been released from public institutions without (1) adequate community-based facilities and services being available or arranged for and (2) an effective management system to make sure that only those needing inpatient or residential care were placed in public institutions and that persons released received needed services.” • NIMH: Community Support Program (1978) • President’s Commission on Mental Health (1978) • GAO Report on Mental Health Care in Jails (1980)

9. Michigan’s Response: Statutory Change • Mental Health Code (P.A. 258 of 1974) • Key Provisions • Departmental (DMH) Responsibilities (Section 116) • “… the department shall continually and diligently endeavor to ensure that adequate and appropriate mental health services are available to all citizens throughout the state.” • “… it shall be the objective of the department to shift from the state to a county the primary responsibility for the direct delivery of public mental health services whenever the county shall have demonstrated a willingness and capacity to provide an adequate and appropriate system of mental health services for the citizens of the county.” • Funding Arrangements and Match • Priority Populations • Core Minimum Services • Civil Committee Reforms • Recipient Rights and Protections • Least Restrictive Environment

10. Michigan: New Problems – New Solutions • GAO Report on Community Placement in Michigan (1977) • Rights Investigations at State Facilities • Establishment of Standards for CMH Boards (1977) • Governor’s Committee on Unification of the Public Mental Health System (1979) • Committee Report: Into the 80s • Committee Recommends: “…establishing a single point of responsibility for voluntary and involuntary entry into Michigan’s public mental health system, for determination and oversight of the services it provides, for system exit, and for the resources that support service delivery. That single point of responsibility is to be located in the community. It is designated as a local mental health authority encompassing one or more counties.” (Into the 80s, Page 5)

11. Michigan: MH System Model in the 1980s • Paradigm for Organization, Financing and Services • Use of Sub-State Entities (County-Sponsored CMHs) • Full Management Concept • CMH as Single Entry/Single Exit to Public System • Relationship with State Psychiatric Hospitals • Use of Community Inpatient Units • Financing Structure and Incentives • Trade-off Dollars • Match Rules • Introduction of Medicaid Services and Reimbursement • State-County Partnership (Relational Contracting) • Continuum of Care Concept (Core Services; Model Programs) • Community Consultation, Prevention & Early Intervention Services • Respect for Diversity • Priority Populations and Specially Targeted Groups • Strong Rights Protection

12. 1980s: Reports, Plans & Concerns • Reports • Report of the Child Mental Health Study Group • Report on Community Placement (Mental Health Advisory Council) • Reports from the Mental Health and Aging Advisory Group • Report on Mental Disability Prevention in Michigan • Quality of Care Task Force Report • Plans • Long-Range Plan for the Mental Health Service Delivery System • Initiatives • State Hospital Census (1989: Adults - 3,430; Children – 360) • Program Developments (Assertive Community Treatment, Psychosocial Rehabilitation, Consumer-Run Services, Children’s Diagnostic & Treatment Centers, Infant Mental Health, etc.) • Concerns: New Cohort of Seriously Mentally Ill

13. Changing Federal Stance in the 1980s • Mental Health Systems Act • Passed (1980) and Repealed (1981) • Medicaid and SSI Restrictions • New Federalism • Block Grants • Community Mental Health Block Grant (1981) • State Mental Health Planning Act (1985) • Response to Problems • Child & Adolescent Service System Program (CASSP) • Protection & Advocacy for the Mentally Ill (PAIMI) • McKinney Homeless Act • OBRA 1987: Nursing Home Screening & Treatment

14. 1990s: Shifting Direction in the New Decade • FY 90-91: Recession and State Budget Deficit • State Hospital Closures: 1991-1997 • 6 State Adult Hospitals, 5 State Children’s Hospitals • Community Placement Problems • DMH/DSS Task Force (1992) • New Paradigm for MH System Proposed • Delivering the Promise: An Enhanced Model for Michigan’s Public Mental Health System (1992) • A Widening Divide on the Direction of State Mental Health Policy

15. Engulfed by Larger National Currents • Debate Over National Healthcare Reform • Failure of the Clinton Plan for National Restructuring • Private Sector Initiatives to Restructure Healthcare Follow • Growth of Managed Care • New Levels and Models of System Integration Proposed • Children’s Services: Coordination and Collaboration • Mental Health & Substance Abuse Integration • Primary Care & Mental Health/Substance Abuse Integration • New Proposals for Organization, Financing, and Service Delivery Arrangements in the Public Sector • Reinvention, Competition and Privatization • Local Public Authorities, Consolidated Funding and Managed Care • Challenges to the Continuum of Care Concept • Consumerism and Empowerment • Practice Guidelines, Quality, Outcomes, Performance & Accountability

16. Public System: Grappling with Uncertainty • Key Questions • What Models or Approaches to Organizing, Financing and Designing Mental Health Services Best Facilitate Improved Outcomes and Health Status for Adults and Children with Serious Mental Illnesses? • What are the Constraints, Limitations or Impediments to These Models? • What Services, Treatments and Supports are the Most Effective in Promoting Positive Outcomes for Adults and Children with Serious Mental Illness? • Service System Research • Approaches to Counter Fragmentation & Inefficiency • Broader Service System Integration Proposals • Service Intervention Research • Evidenced-Based Practices • Service/Treatment integration Strategies

17. 1990-97 Dynamics of State/National Trends • Diminishing Role of the State Mental Health Authority • Dominance of State Medicaid Agencies in Policy and Funding • Rising Interest in Cost-Containment Strategies • Medicaid Managed Care • Escalating State-Local Tensions • Further Devolution/Decentralization of Authority/Funding • Facility Closures/Transfer of Residual State Obligations to CMH • From Partners to Vendors • Competition and Privatization Threats • Disparate Eligibility/Services/Funding/Regulations • Mental Health Code • Federal Grants and Medicaid • Demand for Measurement Systems • Quality, Accountability, Performance, Outcomes

18. State Changes in Mid-Decade • Revisions to the Mental Health Code • System Organization Changes • Mental Health Authorities • Preparation for Managed Care • Value-Based Changes • Consumers and Family Members on CMH Boards • Person-Centered Planning Process Requirement • Established statutory right for all individuals served through the public specialty service system to have their individual plan of service developed through a person-centered planning process. • Creation of the Department of Community Health • Combines DMH, Public Health, Medicaid, Aging

19. Taking the Leap of Faith: Managed Care • States Mimic Private Sector Initiatives to Control Rising Medicaid Costs • Medicaid Managed Care, Capitation and Risk Uncertainty About the Effect of These Arrangements on Public Mental Health Consumers, Services, Organizations BUT More than 60% of CMH Funds Tied to Medicaid • Question is Not If CMH Medicaid Specialty Services & Funds Will be Moved into Managed Care • Question is When and Who will Manage the Services and Funds • Proposals from Large Behavioral Managed Care Companies

20. Medicaid Managed Specialty Services • Fending Off Alternative Organization & Financing Plans • The Hope: • Unified Local Management of Specialty Mental Health Services • Single Contract Links Multiple Policies, Programs, & Payments • The Implications • CMHSPs Become “Prepaid Health Plans” to Manage Medicaid • Medicaid: Entitlement/Defined Benefit • GF/GP: Defined Contribution • The Federal Waiver • 1915(b) Waiver • Deviation from Federal Procurement Requirements • Waiver Approved in June 1998; Implemented in October 1998

21. 1915(b) Waiver: State Plan Services

22. Managed Care Challenges: 1998-2003 • Capitation Funding Struggles and Controversies • SFA Report • Performing New Administrative Activities • Administrative Duties and Cost (Addition of PHP Functions) • Variations in Managerial Sophistication and Structure • Federal Regulatory Framework (Balanced Budget Act of 1997) • Changes in Service System Orientation • From Community Model to Health Plan Model • State-Local Relations • Competition and Privatization Threat • Regionalization • Difficulty Maintaining Characteristics of a Relational Contract

23. From Community Model to Health Plan Model

24. While We Grappled with Managed Care … • Consumed by Organizational, Financing and Regulatory Challenges • Attention/Effort Diverted From Other Issues • Mentally Ill and the Criminal Justice System • Mental Health Needs of Children in the Child Welfare and Juvenile Justice Systems • Children with Multi-System Involvement • Decline of Prevention and Early Intervention Services • Lack of Affordable, Appropriate Housing • Service Innovation & Dissemination Languishes • Departmental Personnel & Training Resource Diminish • Hinders Dissemination of Evidence-Based Practice and Attention to Emerging Issues (Co-occurring Disorders) • Federal Block Grant Provides Only Funding Source for Innovation

25. But Some Gains Realized • Greater Emphasis on Consumer Participation • Guiding Principles Emerge • Community Integration (ADA and the Olmstead Decision) • Recovery Paradigm in Adult Services • Strength-Based, Family-Centered, Ecological Focus for Children’s Services • CMHSPs: Certification and/or Accreditation Requirement • System Funding: Retained Saving and Reinvestment in Services • Use of New Medications (Atypical Antipsychotic Drugs; SSRIs) • Monitoring and Improvement Processes • Development of Quality Assessment & Improvement Strategies • Implementation of Performance Indicator System • Improvement Data Integrity • DCH Site Visit Protocol • Successful Articulation of the Rationale for Public Governance and Management of Mental Health Services

26. A Profile of the Current System

27. The Public Mental Health System Today • Four State Adult State Psychiatric Hospitals • One State Children’s Psychiatric Hospital • Forensic Center and Prison Mental Health Services • Community Mental Health Services Programs • 46 CMHSPs Covering 83 Counties • Responsible for Mental Health & Developmental Disabilities • All County-Sponsored Governmental Entities • Different Entity Forms • Agency (of County Government) • Organization (Formed Through Urban ) • Authority (Special Purpose Governmental Units) • CMHSPs (18) are “Prepaid Inpatient Health Plans” (PIHP) • Qualifications for Managing Medicaid Services on a Risk Basis • Standalone PIHPs and Affiliation Arrangement PIHPs

28. System Mandates, Mission, Operations • Mandates: Constitutional Provisions and Statutory Base • Mental Health Code • Federal Considerations: ADA and the Olmstead Decision • Mission, Guiding Principles, Strategic Vision • Department of Community Health Structure • Major Departmental Administrations and Matrix Concept • Mental Health Administration within the Department • Hospitals, Centers, Forensic/Prison Mental Health Services • Community Services • Serving Two Masters • Mental Health Code; State Issues and Priorities • Medicaid Waiver and Federal Requirements • Office of Recipient Rights

29. Funding for State Operations • Mental Health/Substance Abuse Administration • $9,135,900 • Reduced by Executive Order • State Hospitals, Centers, Forensic, Prison MH • $259,394,600

30. Contracting and Funding for CMHSPs • Contracting with CMHSPs • Medicaid Managed Care Contract with 18 PIHPs • Federal Regulatory Framework (Contract Requirements) • General Fund Contract with 46 CMHSPs • Funding: Major Sources • Medicaid Mental Health Services: $1,372,625,900 • Capitation Payments • CMH Non-Medicaid Services: $328,394,100 • Adult Benefits Waiver: $40,000,000 • Purchase of Service (State Facilities): $97,115,800 • Federal Mental Health Block Grant: $13,000,000 • MiChild -(MH Benefit): $1,309,549.92 (Federal Share)

31. Data Reporting & Performance Measures • Demographics • Services • Costs • Boilerplate Report Requirements • HIPAA Implementation • Quality Management System • Medicaid Waiver Requirements • Performance Indicator System • Site Visit Process

32. Number of Individuals Served by Eligibility Category, 1999-2002

33. Graph of Total Number Served, 1999-2002 Source: Community Mental Health Service Programs Demographic and Cost Data, FY 1999 - FY2002, November 2003.

34. Individuals with Mental Illness, 1999-2002

35. Individuals with a Developmental Disability, 1999-2002

36. Individuals with Dual Eligibility, 2001 & 2002

37. Graph of Number of Children & Adults Served, 2002 Source: Community Mental Health Service Programs Demographic and Cost Data, FY 1999 - FY2002, November 2003. Note: The sum of the counts across categories does not add to the total served as information on age and eligibility designation was not available for some individuals.

38. Number of Individuals Served by Race and Ethnicity, 1999-2002

39. Graph of Number of Individuals Served by Race and Ethnicity, 2002 Source: Community Mental Health Service Programs Demographic and Cost Data, FY 1999 - FY2002, November 2003. All Others: Includes Arab Americans, individuals who are multi-racial and those for whom race and ethnicity information is missing or unknown or those individuals who refused to provide the information.

40. Residence of Persons with Mental Illness

41. Employment Status of Persons with Mental Illness

42. Per Capita Expenditures

43. Total Amount Spent

44. Total Expenditures